Home insurance premiums continued their downward trend in February 2025, offering some relief to policyholders, according to new data released by Pearson Ham. The report, published on March 5, 2025, indicates a 1.3% drop in prices during the month, marking the third consecutive month of decreases.
This positive trend was observed across all UK regions, with the East Midlands experiencing the most significant reduction at -1.6%. Bungalows and large four-bedroom properties also saw notable declines of -1.4%, mirroring patterns from late 2024. Despite these recent decreases, premiums remain 2% higher than they were at the same time last year when the effects of sustained inflation were more pronounced.
Frances Luery, product manager at Pearson Ham, commented on the findings: “The continued decline in home insurance premiums is a welcome relief for policyholders after a period of sustained inflation. However, it’s important to recognise that prices are still higher than they were a year ago. Many may see these reductions as a sign that the market is recalibrating, but it’s too early to draw that conclusion. The impact of recent extreme weather events has yet to be fully realised and we may see further adjustments as claims data filters through in the coming months.”
Motor insurance premiums also saw a decline in February, though at a slower rate. Prices fell by 0.9% in February 2025, the smallest monthly decrease in the past 12 months. This brings the annual movement rate to -19.3%. Pearson Ham suggests the moderation in monthly declines could indicate the market is stabilizing after a prolonged period of falling rates.
Stephen Kennedy, director at Pearson Ham, stated, “After a year of steep reductions, February’s smaller decrease is a signal that insurers are recalibrating their pricing strategies. The biggest reductions continue to be seen among older drivers, while regional and vehicle value differences highlight the complexity of pricing trends in today’s market. The question now is whether this slowdown marks the bottom of the cycle, or if external pressures – such as claims costs and regulatory factors – will drive further adjustments in the months ahead.”
